The BBC could be forced to share the licence fee with rival channels offering public service programmes such as news and children's television. Ministers plan to reopen the debate about who will provide programming that benefits the public - and how it should be funded.

Lord Burns, the former Treasury mandarin who advised the government on licence fee negotiations, will give evidence this week to an inquiry into the future of public service programming set up by the Commons select committee on culture, media and sport. He is expected to advocate allowing rival broadcasters to compete with the BBC for a share of the licence fee in return for providing public service programming.

Committee chairman John Whittingdale believes public service broadcasting is not sustainable in its current form as new digital channels take revenue and viewers from big independent broadcasters such as ITV and Channel 4. 'One way is to make available public money to the crucial broadcasters, perhaps via top-slicing, which I have always found rather attractive,' said Whittingdale. Under top-slicing, part of the BBC's licence fee income would be earmarked for other specific purposes.

The committee is calling witnesses including David Elstein, the former Channel Five and BSkyB chief, whose inquiry into broadcasting for the Tories recommended that the licence fee should be held by the Treasury to fund public service output, with the BBC forced to compete with other broadcasters. Programmes such as Channel 4 News and Thomas the Tank Engine would benefit.

At present the question of how much viewers have to pay for the BBC has been resolved by last month's licence fee settlement, but there is a growing view within government that it is time for a new debate on where that money goes.

Tessa Jowell, the Culture Secretary, rebuffed calls from ITV, Channel 4 and others for a share of the BBC pot. But a debate about the longer-term future of BBC funding is almost certain to take place under the premiership of Gordon Brown, who takes a tough view of BBC finances. Burns said he did not believe in slicing off a set portion of the licence fee for other channels, but added that they should be able to bid for a share. 'It's more about contestability. It should be possible to compete for some part of the licence fee at some stage,' he said.

A senior source at the Department for Culture, Media and Sport said there would be a fresh review of top-slicing 'well in time' to feed into the next round of licence fee discussions, which are due in six years. Debate is likely to focus on the problems of children's programming. MPs argue that planned restrictions on advertising of junk food when children are likely to be watching will dent the revenue raised by independent broadcasters from children's schedules. Labour MP Derek Wyatt is calling for 10 per cent of the licence fee to be distributed by Ofcom among all the broadcasters of children's programmes, to protect quality.